2007 Hedge Fund Performance Commentary – Year in Review
Eurekahedge
Introduction
On the whole, 2007 has been yet another good year for hedge funds, with the composite Eurekahedge Hedge Fund Index1 up a solid 13.6%. This compares favourably with performance during the last three calendar years – 14.4% (2006), 12.2% (2005) and 10.5% (2004). The year’s performance has weathered credit-related woes and the attendant risk aversion, and drying up of liquidity in the underlying markets, which manifested themselves early in the third quarter of 2007. The ensuing down month (August; -1.9%) was one of only two in the last twelve. The other negative month was November (-2%), largely owing to profit-booking after a pro-active Federal Reserve, and a larger-than-expected 50 bps cut in the interest rates mid-September led to a return of optimism into the markets during the following months.
